2020 QCCA 1054, 2020 QCCA 1054

Official English Translation of the Judgment of the Court Droit de la famille — 201114 2020 QCCA 1054 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-028384-196 (500-12-333292-161) DATE: August 12, 2020 CORAM: THE HONOURABLE MANON SAVARD, C.J.Q. CLAUDINE ROY, J.A. STÉPHANE SANSFAÇON, J.A. B APPELLANT / INCIDENTAL RESPONDENT – Defendant v. B RESPONDENT / INCIDENTAL APPELLANT – Plaintiff JUDGMENT [ 1 ] The appellant appeals against a judgment of the Superior Court, District of Montreal (the honourable Mr.

Justice André Prévost), that, on May 16, 2019, granted the parties’ divorce and ruled on corollary relief. The respondent filed an incidental appeal. [ 2 ] For the reasons of Chief Justice Savard, with which Roy and Sansfaçon, JJ.A. agree, THE COURT : [ 3 ] DISMISSES the principal appeal; [ 4 ] ALLOWS the incidental appeal in part for the sole purpose of SUBSTITUTING the amount of $8,351.29 for the amount of $67,752.17 in paragraph [218] of the trial judgment; [ 5 ] Without legal costs , in light of

article 340, para. 2 C.C.P. MANON SAVARD, C.J.Q. CLAUDINE ROY, J.A. STÉPHANE SANSFAÇON, J.A. Mtre Johanna Sarfati For the appellant / incidental respondent Mtre Alexis Ibgui HENDY, GREENBERG For the respondent / incidental appellant Date of hearing: May 28, 2020

REASONS OF THE CHIEF JUSTICE [ 6 ] The parties, who were then domiciled in City B, married in City A in 2007. They subsequently moved to City C, but ceased living together in August 2016. The respondent filed for divorce. The parties eventually agreed on the terms of custody of their children, but disagreed on a number of corollary measures, on which the trial judge ruled. [1] [ 7 ] The appellant, who was dissatisfied with certain ancillary conclusions of the divorce judgment, appealed. The respondent filed an incidental appeal. [ 8 ] The dispute before the Court is exclusively monetary.

The principal appeal essentially raises questions of fact. As for the incidental appeal, the main issue consists in determining the matrimonial regime that applies to the parties and it requires a legal characterization of the New York statute entitled Domestic Relations Law §236, also referred to as the Equitable Distribution Law [2] (the “New York Statute”): does

section 5 of this statute constitute a “matrimonial regime” within the meaning of

article 3123 C.C.Q. , in which case the partition of the parties’ property that is excluded from the family patrimony would be subject to that statute, or is it, instead, an “effect of the marriage” within the meaning of

article 3089 C.C.Q. , which, in the present matter, would result in each party retaining ownership of his or her property. [ 9 ] For the reasons that follow, I agree with the trial judge’s conclusion that

section 5 of the New York Statute must be likened to a matrimonial regime, even though it confers a discretionary power on the court regarding the distribution of assets. In my view, the principles set out on this issue by the Court in 1985, in Palmer c. Mulligan , [3] are still applicable. Background [ 10 ] The parties do not question the context described by the trial judge and forming the background for these appeals. One may therefore refer to paragraphs 1 to 38 of the trial judgment for a detailed description. For purposes hereof, an outline will suffice. [ 11 ] The parties met in 2002.

Both were involved in the music industry: the appellant was a professional bass player and owned a recording studio in City B, while the respondent was a [Artist]. Gradually, the appellant became involved in the respondent’s career, taking

part in the production of her first album, while continuing to work for other artists. [ 12 ] The parties married in 2007. At the time, they were domiciled in City B, although their wedding took place in Quebec, in City A, where the respondent’s family owned property. They married without entering into matrimonial agreements. [ 13 ] The parties continued to work together to produce and promote the respondent’s various albums. Each time, the respondent went on a world tour, in which the appellant participated as a musician.

In other respects, their relationship was strained, due, among other things, to their differences of opinion regarding certain professional decisions. [ 14 ] After the death of the respondent’s mother in 2010, the respondent expressed a desire to move to City C. The appellant was not enthusiastic about this prospect, because, in addition to his lack of knowledge of French, his recording studio, his friends, his contacts and his business were primarily in City B. [ 15 ] The parties nevertheless moved to City C in 2013, but kept their home located in City B.

Although they originally intended to stay in City C only one year, they stayed longer at the respondent’s request. The appellant continued to work as a musician with the respondent and her family, [...], occasionally returning to City B for his business. [ 16 ] The couple’s relationship continued to be strained. The parties ceased living together in August 2016. The respondent filed an application for divorce a few months later, in December 2016. [ 17 ] The trial, in January 2019, lasted four days. In the interim, the parties agreed on shared custody of their two children.

During the proceedings, various orders were made pursuant to which the respondent paid the appellant spousal and child support. The amount was adjusted over the years, in accordance with the parties’ incomes. Upon application by the respondent, the court also ordered the sale of the City B home.

The judgment [ 18 ] The trial judge rendered an exhaustive and detailed judgment analyzing the evidence and the disputed legal issues. [ 19 ] In essence, the trial judge applied the rules of the family patrimony set out in the Civil Code of Québec , because the effects of the marriage were subject to the law of the common domicile of the spouses (arts. 416 et seq. and 3089 C.C.Q. ). However, because the spouses were domiciled in New York at the time of the marriage and had not entered into matrimonial agreements, the judge applied

article 3123 C.C.Q. and concluded that their rights were governed by the New York Statute. He was of the view that

section 5 of that statute was the equivalent of a matrimonial regime under Quebec law, and he therefore applied it to partition the spouses’ property that was not governed by the family patrimony.

[ 20 ] As regards the parties’ support obligations, the judge first concluded that the appellant had not made reasonable efforts to become financially independent and assume his obligations to his children. He therefore imputed $36,000 of income to him for the year 2019 and determined the amount of child support otherwise payable by the respondent as of January 1, 2019 based, in particular, on that estimated income. He also imposed a term (June 30, 2020) on the spousal support payable by the respondent to the appellant, while reducing the amount thereof as of January 1, 2020.

Lastly, he dismissed the appellant’s application for a provision for costs. [4] Analysis – principal appeal [ 21 ] The appellant submits six grounds of appeal which, as I indicated earlier, raise only questions of fact.

He finds fault in that the judge: (1) imputed income of $36,000 to him as of January 1, 2019; (2) imposed a term on the spousal support payable to him by the respondent; (3) ordered a retroactive adjustment of the child support; (4) failed to consider certain income of the respondent; (5) determined that part of the respondent’s inheritance had been used to renovate the City B home; and, finally, (6) concluded that the painting by the artist C was not part of the family patrimony because it was still owned by the artist at the time of the divorce. [ 22 ] I would summarily dismiss these grounds. [ 23 ] On all of these issues, the appellant is asking the Court to retry the case.

Yet, it has repeatedly been stated that, in order to succeed in such a context, the appellant must demonstrate one or more palpable and overriding errors of fact that warrant the Court’s intervention, [5] particularly since some of the issues raised fall within the judge’s discretion and call for greater restraint. I am referring, inter alia , to the imputation of income under

article 446 C.C.P. [6] As regards the term imposed on spousal support, it is true that the Court will act with less restraint and will intervene if the term is mistakenly imposed. [7] [ 24 ] Regardless of the standard of review, I consider that, on all of the issues, the judge did not err. He performed a meticulous analysis of the evidence, which was contradictory in many regards, applying the requisite nuances. The judge indicated the strengths and weaknesses of the parties’ respective positions and clearly explained the basis for his conclusions, which are amply supported by the evidence.

He addressed the appellant’s various arguments, which the latter merely repeats on appeal. If I were to respond to each of his grounds of appeal, I would simply reiterate what the judge already clearly stated. In short, I do not see any reason warranting the Court’s intervention. [ 25 ] I would merely specify that, contrary to the appellant’s allegation, the judge did not order a retroactive adjustment of the support.

Rather, he established the amount of support as of January 1, 2019 in light of his finding regarding the appellant’s estimated income and the income he also determined for the respondent as of that date. In these circumstances, this is not a retroactive adjustment of the support, which, in principle, implies an adjustment affecting the period prior to the judicial proceedings. Analysis – incidental appeal [ 26 ] The incidental appeal is two-pronged.

First the respondent argues that the judge erred by concluding that the concept of “equitable distribution” set out in the New York Statute constitutes a matrimonial regime. Second, she submits that, even if the judge correctly characterized the New York Statute, he erred in its application. More specifically, she faults him for having partitioned the funds held by the company A, which she incorporated before the parties’ marriage and of which she is the sole shareholder. [ 27 ] Each of these grounds merits consideration. (

a) The applicable matrimonial regime and the legal characterization of the relevant provisions of the New York Statute [ 28 ] As regards the application of the rules of private international law to a marriage, articles 3089 and 3123 C.C.Q. expressly distinguish “the effects of marriage, particularly those which are binding on all spouses regardless of their matrimonial regime / les effets du mariage, notamment ceux qui s’imposent à tous les époux quel que soit leur régime matrimonial” from “the matrimonial regime / le régime matrimonial”.

The effects of the marriage are subject to the law of the domicile of the spouses at the time of the divorce, while the matrimonial regime is governed by the law of the domicile of the spouses at the time of the marriage:

3089. The effects of marriage, particularly those which are binding on all spouses regardless of their matrimonial regime, are subject to the law of the domicile of the spouses. […] 3123. The matrimonial or civil union regime of spouses who have not entered into matrimonial or civil union agreements is governed by the law of the State in which they have their domicile at the time of their marriage or civil union. […] 3089. Les effets du mariage, notamment ceux qui s’imposent à tous les époux quel que soit leur régime matrimonial, sont soumis à la loi de leur domicile. […] 3123.

Le régime matrimonial ou d’union civile des conjoints qui se sont unis sans passer de conventions matrimoniales ou d’union civile est régi par la loi de leur domicile au moment de leur union. […] [ 29 ] As stated above, at the time of their marriage in 2007, the parties’ matrimonial domicile was in New York State. Having married without entering into matrimonial agreements, the parties’ applicable matrimonial regime is that of the law of that state, even though they subsequently established their domicile in Quebec (art. 3123 C.C.Q. ). The respondent acknowledges it.

She argues, however, that the concept of “equitable distribution” on which

section 5 of the New York Statute is based cannot be included in the notion of matrimonial regime within the meaning of Quebec law, but must, instead, be considered an effect of the marriage. The New York Statute requires the judge’s intervention for purposes of partitioning the parties’ property at the time of the divorce and, as such, must be likened to any other measure that falls under the court’s discretion at the time of the dissolution of the marriage, such as the compensatory allowance. Consequently, it must be characterized as an effect of the marriage.

Their matrimonial regime, she adds, is that of separation as to property, not within the meaning of the civil law, but under the property law rules of the common law. According to her, Palmer c. Mulligan , [8] on which the trial judge relied, is no longer applicable, because the decision was rendered before

article 3089 C.C.Q. came into force. [ 30 ] I cannot accept these arguments. The trial judge was required to partition the parties’ property according to the New York Statute, with the exception of the property governed by the family patrimony provisions. That is what he did, and there is no need to intervene. [ 31 ] The New York Statute, comprised of Parts A and B, was introduced into evidence before the trial judge through a very short expert report that merely identified the applicable divorce legislation in New York State. [9] The parties agree that only Part B is relevant for purposes of the case at bar.

For ease of reading, when analyzing the statute I will therefore refer to the sections of that Part, without always specifying that they are in Part B. [ 32 ] The New York Statute contains nine provisions applicable, inter alia , in the event of a divorce.

Section 1 defines the principal terms of the statute, while

section 2 defines its scope of application.

Section 3 deals with the notion of an “agreement of the parties”. The obligations regarding financial disclosure are set out in

section

Section 5, to which I will return in greater detail, because it is at the heart of the dispute, is entitled “disposition of property in certain matrimonial actions”. Sections 5.a, 6 to 7 deal, inter alia , with “temporary maintenance awards” and with child and spousal support obligations.

Section 8 specifies the other relief a court may grant, while

section 9 deals with the enforcement and modification of orders and judgments. [ 33 ] More specifically, with respect to the rules for the distribution of property upon a divorce,

section 5 of the New York Statute is based on the concept of “equitable distribution”. [10] Essentially, this concept views marriage as an economic partnership and allows the parties to receive their share of the marital property at the time of the divorce or dissolution of marriage and to re-establish a certain balance in their patrimony. The New York Statute does not refer to the notion of matrimonial regime, which, in fact, is a concept specific to the civil law.

It is, however, similar to statutes that have been enacted in Canada’s common law provinces. [11] [ 34 ] This provision sets out the terms under which the court divides the property of the spouses between them, notably at the time of their divorce. [12] Those terms depend on whether the property is characterized as “separate property” (s. 1(d)) or “marital property” (s. 1(c)).

The first comprises property acquired before the marriage or devolved upon a spouse by bequest or gift, while the second is defined essentially as the property acquired by either or both spouses during the marriage, but expressly excluding “separate property”. [13] Pursuant to

section 5 of the New York Statute, property characterized as “separate property” remains the property of the spouse to whom it belonged at the time of the marriage (art. 5(b)), while property characterized as “marital property” is distributed equitably by the court between the spouses, based on the circumstances of the case and of the parties (s. 5(c)). For purposes of the equitable distribution, the court must consider a certain number of factors outlined in

section 5(d), including the income and property of each spouse at the time of marriage and at the time of the commencement of the divorce proceedings, the duration of the marriage, the age and health of both spouses, their respective needs regarding the use of the family residence, the probable future financial circumstances of the spouses, and any other factor that the court finds just in the circumstances.

The court may also substitute a “distributive award” for the equitable distribution if doing so is necessary in order to achieve equity between the parties (s. 5(e)). [ 35 ] These provisions are suppletive in that the spouses may, before or during the marriage, enter into a written agreement pertaining, in particular, to “the ownership, division or distribution of separate and marital property” (s. 3). Indeed,

section 5 specifies that the court will make an equitable distribution of the property “except where the parties have provided in an agreement for the

disposition of their property pursuant to subdivision three of this part, […]”. [36] As author Brooke Grossman points out, the concept of “equitable distribution” gives the judge broad discretion in partitioningthe property: […] Rather, equitable distribution required the courts to divide the assets fairly, based on the facts of each particular case.

Under thestatute, judges had the discretion to “distribute marital property in accordance with their perceptions of the equities of the particularcase.” […] Under equitable distribution the division of marital assets only has to be fair, not equal; under equal distribution, the division mustbe equal unless “justice and equity require a different division.” Equal distribution was seen as more radical because it required the judgeto divide the marital property fifty-fifty in nearly every case.

By contrast, equitable distribution gave the particular judge discretion todecide how to distribute the marital assets.[14] [References omitted; emphasis added] [37] As regards the discretionary power granted to the court,

section 5 of the New York Statute has similarities to the SaskatchewanMatrimonial Property Act considered in 1985 by the Court in Palmer c. Mulligan.[15] In that case, the Court had to determine whetherthe appellant, who married in Saskatchewan but divorced in Quebec, could benefit from the advantages conferred by the statute, whichwas enacted after her marriage. At that time, pursuant to

article 6 of the Civil Code of Lower Canada, the law governing the matrimonialregime of the parties was the law of the place of their marriage at the time of their marriage (in the absence of a marriage contract).Speaking for the Court, LeBel, J.A. held that the Matrimonial Property Act must be considered to form part of the matrimonial regime,even though it allowed the judge to modify the distribution of the spouses’ property and, in that sense, deviated from the traditionaldefinition of such a regime in civil law.

He adopted a [translation] “broad definition of “matrimonial regime” that included the variousmeasures by which a judge can exercise discretion in partitioning a given category of property of the spouses”.[16] LeBel, J.A. wrote: [translation] [21] The matrimonial regime thus becomes a set of complex legal rules that leaves room for discretionary judicial intervention governedby relevant legislative provisions.

When analyzing the notion of matrimonial regime, one cannot disregard the possibility of judicialintervention, which becomes one of its essential components.[17] [38] LeBel, J.A. added: [translation] [25] The Supreme Court’s definition of the notion of matrimonial regime in Pouliot c. Cloutier13 is broad enough to include this newright to judicial intervention.

Rand, J. provided the following definition of a law pertaining to matrimonial regimes: [original english] “ … a law defining and declaring property rights conceived as terms of the marriage itself, following it through all changes of domicileand susceptible of dissolution or modification only in the events or by the means stipulated; in short, it must be a statutory equivalent to amarriage contract.” [26] Due to legislative developments, the notion of matrimonial regime now includes the possibility of judicial intervention to modify thedistribution of the spouses’ property upon the dissolution of the marriage.

Insofar as the court applies foreign legislation or that ofanother province, it must consider that legislation as forming part of the matrimonial regime.[18] 13 Pouliot v.

Cloutier, (SCC), [1944] S.C.R. 284, p. 291 [39] The Court thereby acknowledged that the existence of a discretionary power conferred upon a court with respect to thedistribution of the spouses’ property was not an obstacle to characterizing a foreign statute as a matrimonial regime.[19] [40] Contrary to the respondent’s argument, I am of the view that the principles expressed in that judgment are still relevant, even ifit predates the enactment of

article 3089 C.C.Q. [translation] “which, for the first time, in legislative form, sanctioned the formaldistinction that is necessary, when applying the rules of private international law to marriage, between the basic matrimonial regime andall the other patrimonial effects of marriage, […]”.[20] [41] Admittedly, the obiter remarks of Brossard, J.A. in O.(H.) c. B.(C.),[21] in which he seemed to be of the opinion that LeBel,J.A. would have concluded otherwise if he had had to consider

article 3089 C.C.Q. in his analysis, may raise a doubt on this point. [42] I note, however, that Brossard, J.A. also adopted with approval the definition of matrimonial regime that the Court had applied afew months earlier in G.B. c. C.C.[22] In that case, the Court put an end to the doctrinal and jurisprudential debate that existed at the timeregarding the characterization of the family patrimony in private international law and concluded that it must be characterized as aneffect of the marriage.

The Court wrote: [translation] [13] First, it seems to us that the family patrimony must be characterized as an effect of the marriage for purposes of privateinternational law. [14] In the domestic law of Quebec, the characterization of the family patrimony as an effect of the marriage is well established inthe jurisprudence. In Droit de la famille - 977, (QC CA), [1991] R.J.Q. 904 (C.A.), Baudouin, J.A. stated the

following at page 908: […] the family patrimony is a direct effect of the marriage and not a type of universal, supplemental and basic matrimonial regime, even if it may be connected thereto, in the broad sense of the expression, for purposes of applying the rules of private international law . One cannot but note that the legislature incorporated the new law [on the family patrimony] in

Chapter VI [sic] of Title I of Book II of the Civil Code , which is specifically entitled “Effects of marriage”.

Furthermore, by prohibiting the spouses from opting out of the family patrimony by marriage contract [art. 423 C.C.Q.] or derogating therefrom [art. 391 C.C.Q.] and by making its application mandatory for all couples [art. 414 C.C.Q.], the legislature withdrew the family patrimony from the arena of freedom of contractual negotiation that applies to matrimonial regimes , even though, when the right takes effect, the legislature allows certain negotiations for the purpose of renouncing the family patrimony [art. 423 C.C.Q.]. […] [17] In the present case, the drafter of the conflict of laws rule, that is, the Quebec legislature, wants all effects of marriage, particularly those which are binding on all spouses regardless of their matrimonial regime, to be subject to the law of the domicile of the spouses (art. 3089 C.C.Q.).

In our opinion, it is obvious that the legislature could not have been clearer in expressing its desire to include the family patrimony as an effect of the marriage (arts. 391, 414 and 423 C.C.Q.; see also the Débats de l’Assemblée nationale , National Assembly, November 28, 1991, SCI-1090 to SCI-1094). [Emphasis added.] [ 43 ] Moreover, the Court specified the difference between the concept of matrimonial regime and the effects of the marriage: [ translation ] [19] Furthermore, the text of

article 3089 C.C.Q. - and the Commentaires du ministre de la Justice, Publications du Québec, 1993, art. 3089 - avoid any distinction between the patrimonial and extrapatrimonial effects of the marriage. The legislature refers to the “effects of the marriage”, but makes no distinction. Any

interpretation that would seek to remove the patrimonial effects from the notion of the effects of the marriage would violate the text and the intention of the legislature. [20] Next, the use of the word “particularly” in

article 3089 C.C.Q. implies, at the very least, that the Quebec legislature did not intend to restrict the definition it wished to give to the notion of the effects of the marriage. It should also be noted that the legislature did not use a similar word in

article 3123 C.C.Q., which establishes the conflict of laws rule applicable to matrimonial regimes. [21] In light of the foregoing, we believe that the definition proposed by Professor Mayer (P. Mayer, Droit international privé, 4th ed., Paris, Montchrestien, 1991, at no. 783, cited in Groffier, Supplément, supra , at no. 53, at pp. 69 and 70) should be accepted : […] what must be considered as the matrimonial regime is therefore the set of rules that [the spouses] have in fact adopted. Everything else falls within the law of the effects of the marriage, which is the ordinary law between the spouses .

The matrimonial regime therefore appears less like a set of questions, which could be enumerated without considering the content of the laws in question, than as a series of substantive rules constituted as a whole in legislation, chosen by the spouses to govern their financial relationship and carved out from the realm of the law of the effects of the marriage . [22] That said, this definition of the notion of matrimonial regime, based on the concept of the spouses’ freedom to choose the regime, and therefore, a contrario , on the concept of constraint imposed by the notion of “the effects of the marriage”, is consistent with the current trend regarding the “evolution of the primary regime which slowly emptied the regimes themselves of their content” (Groffier, supra , no. 53, at p. 71) and replaced them with rules that are binding upon the spouses by reason of their marital status . [Emphasis added.] [ 44 ] The provisions of the Civil Code of Québec relating to the family patrimony (arts. 414 et seq .) thus form part of what many characterize as the primary regime: they are of public order and are binding on all spouses domiciled in Quebec, regardless of their matrimonial regime.

They supplement or complement the matrimonial regime. The same is true of the rules regarding the compensatory allowance (art. 427 C.C.Q. ). [ 45 ] The Court’s reading of

article 3089 C.C.Q. in that judgment requires us to reconsider the broad conceptualization of the notion of matrimonial regime favoured by LeBel, J.A. in Palmer c. Mulligan , in that it implies a narrow definition of this notion for purposes of interpreting

article 3123 C.C.Q. [23] Such an observation, however, is not necessarily irreconcilable with the other guidance in Palmer c. Mulligan to the effect that the existence of a discretionary power granted to the court does not necessarily and for that reason alone constitute an obstacle to the characterization of a foreign statute as a matrimonial regime. [ 46 ] To paraphrase what the Court wrote in G.B. c. C.C. , the matrimonial regime is [ translation ] “based on the concept of the spouses’ freedom to choose the regime”.

In the present case, at the time they married, and even throughout their marriage, the parties freely chose not to enter into a written agreement dealing with “the ownership, division or distribution of separate and marital property”, in accordance with

section 3 of the New York Statute. In so doing, they freely chose to have the partition of their property, in the event of a divorce, be governed by the legal rules, which in their case is

section 5 of the New York Statute. They agreed to rely on those substantives rules, even though they involve the discretion of the court for the determination of an equitable distribution of property that qualifies as “marital property”. [ 47 ] It is true that due to

article 3089 C.C.Q. and the public order provisions relating to the family patrimony or even the compensatory allowance, property subject to this primary regime must be excluded from the partition of the matrimonial regime, thereby limiting the distribution to be made under the New York Statute. [24]

[ 48 ] In the present case, however, the parties are not questioning the application of the rules relating to the family patrimony. Furthermore, this situation is no different from that of parties who, in Quebec, had agreed to adopt the matrimonial regime of separation as to property after the enactment of the provisions relating to the family patrimony and who were to divorce today. Property covered by the family patrimony would be excluded upon the dissolution of the matrimonial regime of separation as to property lawfully chosen by the spouses. Lastly, I am not convinced that

section 5 of the New York Statute constitutes an effect of the marriage because it contains no reference to a “matrimonial regime”, because it allows the court’s intervention in distributing the property or because it can be likened to the concept of compensatory allowance (art. 427 C.C.Q. ), as the respondent argues.

As the author Jeffrey Talpis wrote, adopting such an approach would revive “[…] the legend of separation as to property as the legal regime in the common law jurisdictions simply because such jurisdictions choose to deal with division of assets differently than Quebec domestic law”. [25] Such a solution would be all the more unacceptable in the present case given that, at the time of their marriage, the parties adopted the concept of equitable distribution (by not entering into matrimonial agreements) and could now, simply because they settled in Quebec after their marriage, claim to own their respective items of property that would otherwise be excluded from the family patrimony.

I cannot adopt this approach. [ 49 ] In short, in my view, the trial judge did not err by characterizing

section 5 of the New York Statute as a matrimonial regime within the meaning of

article 3123 C.C.Q. and applying it to the spouses’ property that is not governed by the family patrimony provisions. [26] (

b) Application of the New York Statute [ 50 ] Lastly, the respondent argues that the judge erred in applying the New York Statute to the company A (the “Company”), which was incorporated to manage her artistic activities and of which she is the sole shareholder. The Company, which was incorporated before the parties’ marriage, meets the definition of “separate property”.

The retained earnings belong to it, such that the judge should not have considered them to be “marital property”. [ 51 ] I am of the same opinion. [ 52 ] The trial judge first concluded that the balance in the Company’s bank accounts was not “marital property”, contrary to what the appellant had argued.

After pointing out the weaknesses in the evidence, the judge wrote: [115] On this last point, the Court disagrees with the position taken by [the appellant] to consider as marital property the foregoing balance of [the respondent’s company]’s bank accounts at the date of the separation. [116] This company was incorporated in 2005, two years prior to the marriage, and it appears that [the respondent] is the sole shareholder. [117] [The company]’s assets are independent from those held by [the respondent] personally.

Legal persons are endowed with distinct juridical personality from that of the individuals owning the shares. Such legal persons have full enjoyment of civil rights and have a patrimony on their own. Nothing in the evidence suggests the situation to be different under New York law . [References omitted; emphasis added.] [ 53 ] Based on these premises, the judge should have concluded similarly regarding the Company’s retained earnings accumulated during the marriage.

In view of the absence of evidence of New York State case law to the contrary on this matter, the judge should have concluded that those retained earnings belong to the Company, not the respondent.

They increase the value of the shares held by the respondent, but those shares remain “separate property” under the New York Statute, given that the judge did not conclude that the increase in value was due in part to the efforts of the appellant. [27] [ 54 ] Excluding the value of the Company’s retained earnings from the calculation, the value of the respondent’s property that qualifies as “marital property” and was subject to partition is $48,063.46 and that of the appellant’s property is $31,360.88. [28] Having decided that these sums should be apportioned equally among them, the judge should have ordered the respondent to pay the appellant $8,351.29 for purposes of dissolving the matrimonial regime.

Conclusion [ 55 ] For these reasons, I would dismiss the principal appeal, allow the incidental appeal in part and substitute the amount of $8,351.29 for the amount of $67,752.17 in paragraph [218] of the trial judgment, without legal costs in light of

article 340, para. 2 C.C.P. MANON SAVARD, C.J.Q.

ANNEXE NY CLS Dom Rel &236,

Part 1 of 3 Current through 2017 released chapters 1-505

Section 236 Special controlling provisions; prior actions or proceedings; new actions or proceedings Domestic Relations (DOM) Except as otherwise expressly provided in this section, the provisions of part A shall be controlling with respect to any action or proceeding commenced prior to the date on which the provisions of this

section as amended become effective and the provisions of part B shall be controlling with respect to any action or proceeding commenced on or after such effective date. Any reference to this

section or the provisions hereof in any action, proceeding, judgment, order, rule or agreement shall be deemed and construed to refer to either the provisions of part A or part B respectively and exclusively, determined as provided in this paragraph any inconsistent provision of law notwithstanding. PART A PRIOR ACTIONS OR PROCEEDINGS […] PART B NEW ACTIONS OR PROCEEDINGS Maintenance and distributive award. 1.

Definitions. Whenever used in this part, the following terms shall have the respective meanings hereinafter set forth or indicated: a. The term "maintenance" shall mean payments provided for in a valid agreement between the parties or awarded by the court in accordance with the provisions of subdivisions five-a and six of this part, to be paid at fixed intervals for a definite or indefinite period of time, but an award of maintenance shall terminate upon the death of either party or upon the payee's valid or invalid marriage, or upon modification pursuant to paragraph b of subdivision nine of this part or

section two hundred forty-eight of this chapter. b. The term "distributive award" shall mean payments provided for in a valid agreement between the parties or awarded by the court, in lieu of or to supplement, facilitate or effectuate the division or distribution of property where authorized in a matrimonial action, and payable either in a lump sum or over a period of time in fixed amounts. Distributive awards shall not include payments which are treated as ordinary income to the recipient under the provisions of the United States Internal Revenue Code. c.

The term "marital property" shall mean all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held, except as otherwise provided in agreement pursuant to subdivision three of this part. Marital property shall not include separate property as hereinafter defined. d.

The term separate property shall mean: (1) property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse; (2) compensation for personal injuries; (3) property acquired in exchange for or the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse; (4) property described as separate property by written agreement of the parties pursuant to subdivision three of this part.

e. The term "custodial parent" shall mean a parent to whom custody of a child or children is granted by a valid agreement between the parties or by an order or decree of a court. f. The term "child support" shall mean a sum paid pursuant to court order or decree by either or both parents or pursuant to a valid agreement between the parties for care, maintenance and education of any unemancipated child under the age of twenty-one years. 2. Matrimonial actions . […] 3. Agreement of the parties .

An agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded. Notwithstanding any other provision of law, an acknowledgment of an agreement made before marriage may be executed before any person authorized to solemnize a marriage pursuant to subdivisions one, two and three of

section eleven of this chapter. Such an agreement may include (1) a contract to make a testamentary provision of any kind, or a waiver of any right to elect against the provisions of a will; (2) provision for the ownership, division or distribution of separate and marital property; (3) provision for the amount and duration of maintenance or other terms and conditions of the marriage relationship, subject to the provisions of

section 5-311 of the general obligations law, and provided that such terms were fair and reasonable at the time of the making of the agreement and are not unconscionable at the time of entry of final judgment; and (4) provision for the custody, care, education and maintenance of any child of the parties, subject to the provisions of

section two hundred forty of this article. Nothing in this subdivision shall be deemed to affect the validity of any agreement made prior to the effective date of this subdivision. 4. Compulsory financial disclosure […] 5. Disposition of property in certain matrimonial actions . a.

Except where the parties have provided in an agreement for the disposition of their property pursuant to subdivision three of this part, the court, in an action wherein all or part of the relief granted is divorce, or the dissolution, annulment or declaration of the nullity of a marriage, and in proceedings to obtain a distribution of marital property following a foreign judgment of divorce, shall determine the respective rights of the parties in their separate or marital property, and shall provide for the disposition thereof in the final judgment. b. Separate property shall remain such. c.

Marital property shall be distributed equitably between the parties, considering the circumstances of the case and of the respective parties. d.

In determining an equitable disposition of property under paragraph c, the court shall consider: (1) the income and property of each party at the time of marriage, and at the time of the commencement of the action; (2) the duration of the marriage and the age and health of both parties; (3) the need of a custodial parent to occupy or own the marital residence and to use or own its household effects; (4) the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution; (5) the loss of health insurance benefits upon dissolution of the marriage; (6) any award of maintenance under subdivision six of this part; (7) any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party.

The court shall not consider as marital property subject to distribution the value of a spouse's enhanced earning capacity arising from a license, degree, celebrity goodwill, or career enhancement. However, in arriving at an equitable division of marital property, the court shall consider the direct or indirect contributions to the development during the marriage

of the enhanced earning capacity of the other spouse; (8) the liquid or non-liquid character of all marital property; (9) the probable future financial circumstances of each party; (10) the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party; (11) the tax consequences to each party; (12) the wasteful dissipation of assets by either spouse; (13) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration; (14) whether either party has committed

an act or acts of domestic violence, as described in subdivision one of

section four hundred fifty-nine-a of the social services law, against the other party and the nature, extent, duration and impact of such act or acts; and (15) any other factor which the court shall expressly find to be just and proper. e. In any action in which the court shall determine that an equitable distribution is appropriate but would be impractical or burdensome or where the distribution of an interest in a business, corporation or profession would be contrary to law, the court in lieu of such equitable distribution shall make a distributive award in order to achieve equity between the parties.

The court in its discretion, also may make a distributive award to supplement, facilitate or effectuate a distribution of marital property. f. In addition to the disposition of property as set forth above, the court may make such order regarding the use and occupancy of the marital home and its household effects as provided in

section two hundred thirty-four of this chapter, without regard to the form of ownership of such property. g. In any decision made pursuant to this subdivision, the court shall set forth the factors it considered and the reasons for its decision and such may not be waived by either party or counsel. h. In any decision made pursuant to this subdivision the court shall, where appropriate, consider the effect of a barrier to remarriage, as defined in subdivision six of

section two hundred fifty-three of this article, on the factors enumerated in paragraph d of this subdivision. 5-a. Temporary maintenance awards […]